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January 24, 2010  Tags: , , , , ,   Posted in: Research On Australian Stock Trends  2 Comments

Dave’s Trading Diary – Short Selling Added To The Mix

 See the Trading Diary Here:

Hi Guys,

Well, as promised last week, I spent some time creating short selling rules.  Short Selling is where you make money as the share falls, in stead of when it rises, and is particularly useful during a bear market (where share prices fall considerably for a period of 6 months or more).  I’ve added some short sales this week to the diary.

How To Know When It’s The Right Time To Buy Shares

I also looked at one of my favorite books “Reminicences of a Stock Operator” by Edwin Le Fevere, the story of Jesse Livermore.  In it, Jesse makes a comment about “general conditions being right” before you decide to buy or sell.  So I did some research and found out what some UK Fund Managers look for as being the right general conditions before they buy again.

  1. The US Housing Market should stabalise and start to rise.  As yet US housing hit a 15 year low in July 2010, and lending is very tight, which brings us to indicator number two:
  2. Banks need to start lending again.  The UK has a credit indicator, showing how much lending is being done by the banks.  More is optimistic, less is pessimistic and bad news for growth.  Currently in Australia business lending is tighter than usual.
  3. Investors would shrug off bad news.  Sometimes investors realise that things are so bad, any new bad news doesn’t come as a shock any more.  This is usually seen around the bottom of a bear market move.
  4. Businesses turn optimistic.   Currently businesses are giving very cautious outlooks in their reporting, indicating that they are not optimistic at present.

And after all is said and done, history shows us that the average recession lasts 14 months.  If we’re going for another one, this will also be good to know.

What About Individual Shares This Week?

This week I have 3 sells and 1 buy.  I figure I’ll just take the signals as they come for now, seeing as the market is treading water.  Some stocks have still outperformed or underperformed the market.

Short sells are APN, BOQ and NWS.  I would have added MBNas well, but no short selling was allowed on this stock.  All are a case of being below their 50 day and 200 day moving averages, with little support left – a simple variation of William O’Neil’s bear market rules.

Buys are WSA, after a Dow Theory entry on a weekly chart.  See the diary for more info and charts.  No sells for the existing portfolio this week, although BKN is coming close.  Another lower weekly close would do it.

As always, if you enjoyed this, link to it from your site or send it to your friends.

Happy trending!

Dave McLachlan

August 29, 2010   Posted in: Dave's Trading Diary  No Comments

Market Watch Weekly – How Long Does A Sideways Market Last? and ASX Top 200 “Darvas Box”

By Dave McLachlan

Click below for the latest Market Watch Video (if you can’t see the video, click the link above) - See Terms Here

UPDATE:

A little bit of jargon as the title suggests, but this week is extremely exciting!  We look at the sideways action over 110 years of history on the Dow Jones, and how long they have lasted for.  Very cool stuff. 

Also – the massive support of the markets at 10,000 for the Dow and 5,000 for the FTSE continue, and where did the Dow find support on Friday?  That’s right – the long term trend line!  Brilliant stuff guys, brilliant stuff.  It’s all in the Video below – sit back, relax, watch it with your favortive cup of coffee, tea or something harder and enjoy!

Of course please do your own due diligence - a great place to start is the free trading and investment course on this site.  Check out my personal Trading Diary if you want to see me practice what I preach. 

Happy trending,

Dave McLachlan

August 29, 2010  Tags: , , , , , , , , , , , ,   Posted in: Market Watch Weekly  2 Comments

Dave’s Trading Diary – A Commitment Phobic Stock Market

 See the Trading Diary Here

Hi guys,

One thing has become very clear in reporting season this year: that while many companies have reported decent profits – many on target or just over target – they have also forecast hard times ahead for the next financial year.

Where does this leave the market though?  Mostly in a state of confusion - and this is clearly shown in the sideways price action we’ve had over the  last 10 months.  To cut a long story short, the market is largely still treading water, and while I’ll continue to take entry or exit signals according to my rules, there is one thing that worries me, and that is Market Wizard William O’Neil.

Bear Market Rules According To William O’Neil

In 1962 William O’Neil saw a looming bear market, got out of stocks and started “shorting” the market (where you make money as the stocks fall).  His current book “How To Make Money Selling Stocks Short” is based on his learnings that stemmed from this experience, and William O’Neil outlines a few rules for the best time to short a market:

  • The best time is usually 4-7 months from the market peak – not right at the peak
  • The market will usually have tried 3-4 times to get above its 50 day moving average – and failed

So, why worry?  These are the exact things our market is doing at the moment on the All Ords and ASX Top 200.  Not to mention we are coming into September, which according to legendary trader John Murphy is the weakest month of the year, cyclically.  I am frantically trying to back-test these shorting rules on individual stocks, so I can be ready if and when this occurs!

What About Individual Stocks This Week?

The only sell I got this week was RIV.  In my ignorance I left it another week after getting the Dow Theory sell signal last week (RIV prefers 1 cent below the previous trough, not a close below the previous trough), and so my sell price is $9.18 instead of $9.69.  Yes, it pays to be on guard!

Other stocks are still kicking along, despite the sideways / down movement of the market.  David Jones (DJS) is showing a nice profit, IGO also, and BKN gave us a nice dividend and is still holding up like the rest, in a sideways movement.

No new buys for me this week, and now the first video course is finally out and finished it’s time to get back-testing on medium-term shorting rules.  We could be in for a good one, and I want to be ready if we are.

Happy trending everyone, enjoy and have a great week!

Dave McLachlan

August 22, 2010  Tags: , , , ,   Posted in: Dave's Trading Diary  No Comments

Market Watch Weekly – Continuation Pattern Could See All Ords fall to 3800

By Dave McLachlan

Click below for the latest Market Watch Video (if you can’t see the video, click the link above) - See Terms Here

UPDATE:

A close below 4400 on the All Ords this week would signal a short term down trend that could go to 3800, according to trend line and continuation pattern theory.

We had previously thought that this prediction – also based on Elliott Wave theory – would not come true, but the market is about to give it a second shot! 

Check out the Video below for all the good stuff - but most of all have fun and enjoy!

Also this week, head and shoulders patterns are forming on the FTSE and Dow Jones – usually a market topping pattern, however there is a LOT of support at 10000 for the Dow and 5000 for the FTSE.  Someone or something is keeping the market above this level – and if if breaks by too much there could be a significant snow ball effect as stops and margin calls get triggered.

Not to mention guys – September is statistically the weakest month in the share market – it is where the carnage last year started (ending in March).  Most people think October is the weakest month – while 2 major crashes have occurred there, September statistically remains the weakest.

As always, thanks heaps for checking out ASX Market Watch – Subscribe in the top right hand corner for weekly updates! 

Of course please do your own due diligence - a great place to start is the free trading and investment course on this site.  Check out my personal Trading Diary if you want to see me practice what I preach. 

Happy trending,

Dave

August 21, 2010  Tags: , , , , , , , , , ,   Posted in: Market Watch Weekly  No Comments

The Free Stock Market Video Course – Finally Here!

Hi everyone,

It’s taken a long time to create, but the free video course on trading and investing is finally here!

Hundreds of people have been asking me for an easy way to get into the stock market and start making money.  In today’s market people don’t want to have to learn hundreds of different methods for making money – you just want the ONE that works and doesn’t take up too much time.  I get that.

That’s why I created the free video course - to show you one of the easiest and most powerful ways to jump into the stock market and start making money from day one – in four fully featured videos plus a BONUS video if you invite a friend. 

For those of you who are just starting out, we cover ALL the ins and outs of the method in an easy to learn video format.  One that will bring you up to speed quickly.

For those of you who are more advanced, we also cover how to make MORE money from your current method, and ways of predicting the future in the market.

And finally, the BONUS video (if you invite a friend) shows you whether you will have what it takes to make money in the stock market when you finish learning.  Needless to say, this is extremely useful to know before you risk any of your hard-earned cash.

Get The Free Video Course on Trading and Investing Here

So check it out!  I hope you enjoy.  Please send feedback if you like it, have ideas, or have constructive criticism about the course or this site.  It’s always good to hear from you and I’m always trying to improve.

And in the mean time, happy trending!

Dave McLachlan

August 18, 2010  Tags: , , , , , , , , ,   Posted in: Articles On Building Wealth  No Comments